Nokia’s brand motto "Connecting People" should instead be "Disconnecting People" as the company plans China layoffs of up to 3,000 workers in its Beijing factory.

Moreover, the company’s factory may be relocated to another city within three to five months, according to reports in Chinese local media.

Nokia’s Beijing factory is located in the Beijing Economic-Technological Development Area and its output already saw significant declines compared with previous years. Microsoft China said that for the development and search sector, they plan to cut engineering design activities at the Beijing Nokia development and research center and only maintain some supporting functions. Stephen Elop, head of the Microsoft device unit, revealed that in the future, the company’s mobile phone manufacturing will mainly be completed in Hanoi, Vietnam; while some will be in Dongguan and Beijing.

In September 2013, Microsoft acquired Nokia’s device and service businesses for USD7.5 billion, including its China research and development center and manufacturing factories. Microsoft last week announced a large-scale adjustment to its global employee structure, which will cut 18,000 employees and about 12,500 of them are Nokia.

Satya Nadella, Microsoft’s chief executive officer, said that the company hopes to simplify the enterprise structure of the business. However, industry watchers said that the large-scale layoff will affect Microsoft’s enterprise culture and the company must maintain employee loyalty to prevent brain drain.

Devott Publications

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